As an online entrepreneur, I invite you to get into
investing early to secure your financial future and boost your chances of early retirement.
#1. Learn Before You Get Started
First, if you want to succeed with your
investments, you need to know what you are
doing. The biggest mistake you can make as an
entrepreneur is putting your money into an
investment without understanding what’s really
going on. You wouldn’t go skydiving if you didn’t
know how to operate the parachute, so why
would you invest without knowledge?
Finding information isn’t difficult in this era of
the Internet. You have plenty of resources to
help you out and even reading financial
publications, such as The Wall Street Journal,
can provide you with a bit more knowledge.
#2. Protect Your Assets
It is crucial that you protect your business, as
well as your investments, from creditors. You
need to structure your business and your
investments properly to ensure that if something
goes wrong, creditors won’t be able to access
your assets.
Investing is a good way to guarantee your
financial future is secure even if something goes
wrong with your business adventure. Therefore,
you need to make sure that creditors won’t be
able to access your personal investments and
savings in case things go awry. This ensures you
sleep soundly at night!
3. Create a Sound Strategy for Your Business
Naturally, your business also needs to have an
investment strategy. In an Inc.com article on
steps to take to grow your business , the
recommended strategy is all about the 80/20
rule. This means that 80% of your resources
should go to core business opportunities and 20%
to new adjacency opportunities.
In practice, this means that you focus most of
your efforts to your customer base and invest in
maintaining their loyalty. But you also want to
keep the adjacent opportunities in mind. These
are new investing ventures and growth strategies
to explore and which can help your business look
to the future.
#4. Make It Impossible to Touch Your
Investments
One of the biggest investment mistakes to make
is all about changing and tweaking your
investments too often. You should have some of
your investments tied into funds and portfolios
that are almost unreachable to prevent you from
doing this. This ensures that you don’t make
decisions too quick and in the heat of the
moment.
The truth is that majority of investments
fluctuate a lot. If you withdraw your investments
every time they go down, you’ll end up loosing a
lot more than if you just stick to your plan. Of
course, you want some investments easily
accessible, but majority of your money should be
kept away from reach.
#5. Reduce Risk by Diversifying
You don’t want to put your eggs in one basket,
but spread them around a little. Even if you are
investing into something with a relatively small
risk, like property, you still don’t want it to be
your only investment venture.
Try to find at least a few different ways to
invest. This guarantees that if one venture goes
sour, you don’t end up loosing all of your money.
The Money Advice Service’s guide to diversifying
is definitely worth a look.
#6. Understand Your Pain Threshold
Although there are many options that provide you
a relatively safe way to invest your money, there
are ventures that might just see your
investments disappear. You need to, not only
understand the risk of losing your investment,
but also understand how much you are able to
lose.
Investing is more about controlling losses than it
is about making a profit. You need to set yourself
clear limits for losses that you don’t want to
cross. Sometimes withdrawing from an
investment with a small loss might be better than
sticking it to the end only to lose more money.
#7. Get on Top of the Tax Code
When it comes to investing, you want to make
sure you don’t end up losing a chunk of your
profits in taxes. Tax efficient investing is one of
the first things you want to learn about before
you start making money with your investments.
It is also important to understand the taxation,
as you don’t want to end up doing anything
illegal with your investments. You can find plenty
of tips from websites like MoneyWise , to
guarantee your investments are tax efficient.
#8. Learn From the Legends
There are some big names in the investment
world that you need to know about. Giants such
as Warren Buffet and Jim Slater can teach you a
thing or two about investing your money and
making it big.
But learning from the legends doesn’t mean that
same as copying other people’s advice
mindlessly. Even the big names make mistakes
and provide advice that might not bear fruit.
Don’t expect to look at their portfolio and then
get rich by just copying it.
You want to read their interviews and understand
their investment methods, but ultimately you
need to learn to make your own choices. You
are the only one who can make it work in your
own circumstances.
#9. Remember To Save
Naturally, you shouldn’t just invest your money to
different funds and assets. You also must start
saving your money as well. Saving is a great way
to guarantee your financial future is secure even
if your projects and your investments don’t
provide the hoped end-results.
Saving for your retirement is one of the most
important things you need to do as an
entrepreneur. So, you want to look around for
different ways to save and invest to ensure you
have a comfortable pension waiting for you once
you are ready to retire.
#10. Find Your Niche
Although you want to diversify your investments,
you should still find a niche in investing where
you excel. Perhaps you are interested in
commodities or maybe you’d like to consider
private equity investing.
Having an investment niche helps you in two
ways. First, it allows you to direct your energy
into gaining knowledge in that specific field. For
example, if you are interested in private equity,
you can check platforms like the one at
Dealmarket to find news and tips regarding
private equity investing. As already mentioned,
this extra knowledge is essential to guarantee
you make the right choices.
Second, finding your niche can help you stay
passionate. If you focus on investing things that
you are passionate about, you are more likely to
yield bigger returns. You’ll have more energy to
keep up to speed with your investments, when
you don’t just care about the amount of money
you make, but you are passionate about the
results as well.
#11. Be Patient
Finally, the unfortunate truth is that you most
likely won’t be able to hit it big overnight. As an
online entrepreneur, you know that it takes time
and effort to succeed in business and this
applies to investing as well. Some investment
ventures may be able to provide you quicker
returns, but in general investing can take a while
to truly start producing you the returns you want.
Patience is one of the key characteristics for
making it as an entrepreneur, as well as
succeeding in investing. You don’t want to rush
your investments. Just focus on what you want
to achieve and work hard to achieve it.
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